Only his military pay qualifies for the combat zone exclusion.
Any civilian pay he received while in a combat zone is taxable. It should be reported on a Form W-2 and entered in the Form W-2 interview.
Combat Zone Tax Exclusions
Enlisted personnel, warrant officers, and commissioned warrant officers can exclude the following from their income:
- Active duty pay earned in any month you served in a combat zone
- Imminent danger/hostile fire pay
- A reenlistment bonus if you reenlisted in a month you served in a combat zone
- Pay for selling back leave in any month you served in a combat zone
